Buying a home is often the largest financial commitment we make, which can feel both exciting and scary. As market conditions and interest rates naturally shift over time, many renters find themselves at a crossroads, wondering if they should leap into homeownership now or wait for a different economic climate.
The simple answer is that there are benefits to both renting and owning a home, and it depends on each person or family’s needs and goals. Renting offers flexibility and potentially lower short-term costs. However, homeownership can build wealth over time and, in the long run, be more cost-effective than renting. Owning a home can also have positive tax implications, often reducing your tax burden as mortgage interest and property tax payments may be deductible from your federal taxes and many state taxes.
So, should you buy now or wait?
Arvest’s advice is this: If you’ve found a house you want to make your home, do your homework and shop around until you find a lender with the right financial solution to help you get into it.
At Arvest, for example, there are many flexible financing solutions, including the Arvest Homebuyer Advantage program. In partnership with the Arvest Opportunity Fund, this program helps qualified first-time homebuyers secure financing with no down payment and no private mortgage insurance fee, empowering homeownership success through financial education requirements.
Mortgage rates are always changing, cycling through highs and lows. The mortgage industry has a great quote: “Marry the house and date the rate.” This means you should find a house that fits your needs and that you can afford for the long term, and accept the current market interest rate.
While you may not get the rate you hoped for if you buy today, you may be able to refinance to a lower rate in the future. And even if rates don’t drop back to the historic lows we saw in 2020 and 2021, a homebuyer could still reap the benefits of a rate that’s lower than when they first purchased.
Although adjustable-rate mortgages received a bad reputation in the 2008 market, they aren’t the same today. An adjustable-rate mortgage can be beneficial in higher-rate environments because rates can drop as they cycle. It’s another opportunity to cash in on a lower rate.
It can be hard to accept rates that are double what they were in 2020 and 2021, but it’s important to remember that those were historically low rates and may not return to those levels anytime soon. According to Freddie Mac, average 30-year fixed rates fluctuated between 6% and 7% from 2001 until the Great Recession in 2008. It was only during the economic recovery that rates began to edge down to 3.5% to 5%, leading up to the pandemic in 2020. It’s a good reminder of how cyclical rates can be.
If you’re ready to get serious about being a homeowner, talk with a local mortgage lender to get pre-qualified. Getting pre-qualified is not a commitment to buy. It’s an educational step that helps you understand how much you can afford, your estimated monthly payments and what loan programs might be available to you.
Contact an Arvest mortgage lender to start your homebuying journey today.
Arvest is an Equal Housing Lender and Member FDIC.
